Not all treaties contain an article for independent personal services. It is not mentioned in the Canada-Mexico treaty and has been deleted in the Canada-US treaty (without re-numbering). The reason for this is that, in reality, it is included in business – if you are performing services independently it doesn’t really make a difference if you are doing it through a corporation or as an individual, you are carrying on a business.
Those treaties that do include it, normally include it in Article XIV. Some treaties, such as the Canada-Japan and Canada-UK, limit independent personal services to professional services. Professional services may be defined, such as in the Canada-UK treaty which states that it includes “scientific, literary, artistic, educational or teaching activities as well as physicians, lawyers, engineers, architects, dentists and accountants”.
In almost all cases, you will find that the independent personal services revenue is reported only in the country of residence unless the person has a fixed base or permanent establishment in the other country. In some cases, there will also be additional factors that may influence where it is report, such as the Canada-New Zealand treaty which includes a 183 day rule.
So, as you can see, this is an area where the specific tax treaty must be reviewed to determine what the tax consequence will be.